ASQ - Team and Workplace Excellence Forum

December 1997


Whole Foods Includes Whole Self
Capitalizing on Human Resources Encourages Growth at Whole Foods Market

Making Waves With Employee Recognition
Rewards and Recognition Practices at Sea World

Honeywell's High Flying Division Shows Company The Way To Participation
Union-Management Relations Help Airplane Part Manufacturer Excel


Freedom's Just Another Word
by Peter Block

Highs and Lows Of Participation
by Cathy Kramer


Brief Cases
Business News Briefs

Views for a Change

Book Review


Whole Foods Includes Whole Self
Capitalizing on Human Resources Encourages Growth at Whole Foods Market

Walk the aisle of your local grocer and look around. Do you see shelves filled with organic nut butters, books on aromatherapy and giant bins filled with coffee beans? If so, you are probably one of millions of Americans shopping in a new breed of store - the organic supermarket.
From the exotic to the mundane, shoppers find products that feed their families and ease their minds. And it's not what these stores do have that matters - it's what they don't. You will not find breads with artificial colors, sweeteners or synthetic preservatives; meats with antibiotics and synthetic hormones; or healthcare products tested on animals.
Attribute the trend to an awakening social conscious, pressure to live healthier lifestyles, or call it the latest fad - whatever it is, it's big business. A recent Business Week article reports that organic-food sales have been growing 20-25 percent in the last seven years. And Whole Foods Market is leading the way.
Five years ago, Whole Foods operated only 10 stores totaling $92.5 million in sales. Today, through aggressive mergers and acquisitions, the Austin, Texas-based chain employs more than 11,000 people in 75 stores, under the names Whole Foods Market, Wellspring Grocery, Bread & Circus Whole Foods Market and Fresh Fields. It is the largest chain of natural food supermarkets in America. Combined, these stores accumulated total sales of $1.1 billion in fiscal year 1997.
But it's not their appetite for growth that makes Whole Foods unique - it's their culture. Every store is organized into self-managing teams responsible for their own hiring, training, ordering, scheduling and outplacement. Gainsharing and stock-option programs reward team members for store and team performance. An open-book communication policy provides every team with reports on sales, labor, margins, balance sheets and other key financial information. Every team is expected to run their department as a business. From the cheese shop to the meat counter, every team member is given the tools to make decisions about how they work.
News for a Change Editor, Bill Brewer, spoke with Jody Hatch, vice president, human resources, Whole Foods Market, about the challenges of tremendous growth, merging organizations and managing employees in an empowered environment.

NFC: Whole Foods has experienced rapid growth through mergers and acquisitions, what are the challenges of incorporating new employees into the system of accountability and responsibility at Whole Foods?
We do have significant challenges from a cultural standpoint. For the employees of the company that we merge with everything can be quite traumatic. One of the interesting things that I've noted in the last couple of mergers that has been difficult for the employees is our notion and our core value of self-responsibility.
In traditional organizations it's "so and so told me what to do, so I'm doing it." It's a way to abdicate responsibility and ownership. We certainly have company policies and we certainly have people that direct other people in how to do their jobs, but we also have the notion that if you're on a team you're accountable for the success or failure of your team. You can hire whomever you want on the team as long as their references check out and as long as they meet basic good hiring practices. You can hire four or five people if you want or you can hire two. We hope you stay within the wage guidelines and labor budget, but if you see a shining star and you want to pay them a little bit more, you can, because it's your team. You would have to answer to your co-workers for any decisions like this. And of course financial results are key as well, so there are some built in checks and balances that guide team decision making.

Even though you have the latitude to make certain decisions and go outside of the box, you are accountable. That can be a bit scary for some people. So, we've seen some, especially team leaders of the companies we've hired, get a little nervous with this concept. A couple have actually left. They said, "No, I don't like this. I like being in a safer environment where I don't have to shoulder the responsibility and be accountable."


December '97 News for a Change | Email Editor
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